Between 2012 and 2014, California regulators made critical decisions that ultimately restructured political economies of mobility around the world. In municipal and then state regulatory bodies, policy-makers refused to enforce existing taxi laws and regulations against so-called “ridesharing” services, including industry leader UberX, as well as Lyft, and Sidecar. Regulators determined that the companies were not taxis but “transportation network companies” (“TNCs”), and created new rules to govern them. These California rules were the first of their kind anywhere in the world. The regulations and logics that they engendered were subsequently replicated nationally and internationally. The global regulatory response devastated worker livelihoods and transformed what had been a low-paid full time job to even lower-paid part time gigs.

How did workers make sense of rapid change in their industry? What were their reactions when regulators refused to enforce existing taxi rules and to the rulemaking that ultimately devastated their livelihoods? And what can their narratives, experiences, and understandings tell us about the political economy of law amidst innovation?

Taxi workers in my ethnographic research challenged two fundamental aspects of the prevailing popular and academic narratives of “uberization” as a neoliberal political and economic re-ordering. First, workers argued that this legal transition and the social and political norms it propagated were embedded neither in technology nor in techno-utopian imaginaries. Instead, in making sense of their own precarity, taxi workers placed blame on the structural power of private actors and the instrumental power of regulators. Second, in telling the tale of how law and power worked together to facilitate the demise of their tenuously secure work, drivers were emphatic that this was not a story of deregulation or state withdrawal. Contrary to some traditional academic accounts, taxi workers argued that both the rule-making process and the rules themselves created and valorized a market in which the state had a strong, active, and even authoritarian hand.

Now a global phenomenon, Uber began as UberCab in San Francisco in 2010. Less than two years later, Lyft and Sidecar launched a different model: non-professional private drivers using their own cars and a suggested, non-mandatory price for the ride. Uber adopted this new model as UberX but with a mandatory fee set by the company. Shortly thereafter, the United Taxicab Workers—a twenty-five year old, worker-led taxi driver advocacy organization—alerted city officials to the growing number of unlicensed taxis competing for their work and roving the streets of San Francisco. They lobbied the city to enforce taxi regulations against the companies.

Mark, a UTW leader and long-time taxi driver, was frustrated at the city’s inaction. He told me in late 2012,

These are worse than illegal limos. They don’t even have licenses! People are using their own cars. Non-professional drivers. They are running afoul of every taxi regulation. They claim they’re innovative and new, but we already have this technology! This is what Cabulous [a taxi app] is. We’ve been using this for the past few years. This isn’t about technology. This is just a new exploitative business model—one step removed from the leasing model that the taxi companies have been using for years. They’re just bandit cabs. We’ve been pushing the MTA to issue another cease and desist but they won’t. They won’t enforce their own regulations. (my italics)

Mark argued that the Uber business model was not about technological innovation—but about the innovation of capital. He, like many other taxi drivers, emphasized that the technology itself pre-existed Uber. He understood Uber as an exploitative evolution from the precarious leasing model introduced in the San Francisco taxi industry in the late 1970s. Unlike taxi drivers who had to pay taxi companies for the lease and gas before they could venture out onto the road, Uber drivers also had to bear the costs of their vehicle maintenance and hybrid liability insurance (which did not exist until 2016). To make matters worse, the companies were operating without vehicle caps or fare regulations—the two key regulations that taxi workers had long used to maintain some semblance of wage stability.

Ruach—who, like Mark, had been driving in San Francisco since the late 1970s—argued that Uber’s innovation was to centralize dispatch, which UTW advocates had been pushing for years.

The media keeps selling this as innovative technology. This is not innovative or about technology. We have been trying to get the Board of Supervisors to pass an ordinance to mandate centralized dispatch for years. They won’t do it. The dispatch companies and the cab companies push back. And now, all of a sudden, these tech companies come in and everyone’s excited about centralized dispatch. HELLO! Have you been listening [to us] all these years? That’s all these companies are. (my italics)

When I asked worker advocates why they thought the city was unwilling to use their regulatory powers to stop these companies, especially since the SFMTA had just commodified and sold 900 medallions two years earlier, they blamed it on the structural power of capital. Barry, another driver and advocate, described Uber’s massive lobbying efforts as “graft.” Although in most cases, the lobbying was technically not illegal, he understood it to be steeped in anti-democratic, corrupt practices. In a conversation we shared in 2013, he explained,

Ron Conway was an early funder of Mayor Ed Lee, and he is also an investor in Lyft and Uber. There are rumors [former] Mayor Willie Brown is getting his pockets lined as well. This is just graft. They are using the language of the tech economy. But they know that’s not what this is about. These are just taxi companies but with Wall Street money. Infinite amounts of money. We thought they [the taxi companies] were corrupt. (my italics)

In 2013, a rule-making process that began in late 2012, the California Public Utility Commission decided two critical things. As a matter of law, Uber offered pre-arranged rides and therefore, under the California Constitution, was to be regulated not by (more progressive) municipalities but exclusively by the state. And second, in the explicit name of “innovation,” the agency was to create a new regulatory category—Transportation Network Companies—and regulate them differently than limos and taxis—without car licenses, vehicle caps, or fare regulation.

Drivers like Mark, Ruach, and Barry directly related the structural power of venture capital to this regulatory outcome. They often felt their advocacy was misunderstood; they did not oppose technology. In fact, they laid claim to the technology themselves. But they protested the specific role of law, and in Barry’s words, the “greed and graft” through which those laws were achieved, in compelling the demise of their industry and livelihoods. They acknowledged that by producing two regulatory regimes, officials had eased the burden on TNCs at their expense. But they framed the character of the state as heavy-handed, not as laissez faire. This was not government facilitating a “free market” through deregulation, but preventing competition by maintaining fares at below market rates, and creating an overall unequal playing field.

Today, workers’ wages across the Uber-taxi divide are roughly 65% of what they were in 2010. They are often below the minimum wage. Told through the eyes of workers, the case study of how regulators responded to rule-breaking platforms and created the city’s contemporary Uber economy can neither be explained through innovation fanaticism nor fundamentally through a politics of efficiency and deregulation. Taxi workers understood innovation discourse as obscuring both their everyday hardships and corruptive, though legal, state practices. And they reframed the law in this process as playing an active role in undermining democratic principles, producing the myth of a free market, and exacerbating political and economic inequalities. As Mark wrote to me in a text following the fifth recent suicide of a taxi driver, “The invisible hand has shown its hand.”

Veena Dubal is Associate Professor of Law at U.C. Hastings College of the Law, San Francisco.